Another Irish referendum campaign -- the politics of the upcoming vote on the European Fiscal Compact

Little more than six months after Irish voters were asked to decide whether to amend Bunreacht na hÉireann (the Constitution of Ireland) on two constitutional referendum questions, they are now being asked to vote on another, quite different amendment.

This one would authorize the Irish government to ratify the European Fiscal Compact. Formally known as the Treaty on Stability, Coordination, and Governance in the Economic and Monetary Union, it requires all countries that sign up to it to have budgets that are in balance or in surplus within a year of its coming into force.

The United Kingdom and the Czech Republic are the only European Union (EU) member states that have declined to sign up to the fiscal compact. Ireland, due to its own constitutional quirks and on the legal advice of the Attorney General, is the sole country that has to hold a popular vote before it can sign up.

The fiscal compact has been somewhat euphemistically called a progressive step to foster full European monetary integration, yet it is really a proactive measure to prevent a repeat of the recent sovereign debt crisis. The incentive for countries to sign up to the fiscal compact’s restrictive provisions is that only signatories will have access to funds from the European Stability Mechanism (ESM) if and when they need to be bailed out in future.

A question that might immediately come to mind is as follows. Given that a majority of economists believe that it is only a matter of time before Ireland will need a second bailout, how could anyone vote against allowing the government to ratify the fiscal compact?

The putative answers – that the ESM mightn’t be the only potential source of bailout funding, that there may be space to negotiate access to the ESM even if the referendum is defeated and that the International Monetary Fund (IMF) could provide financial assistance – reveal the complicated mechanics of the European financial system and of the IMF.

Leaving aside just what options may be available depending on the outcome of the vote on May 31st, however, what are the domestic politics of the upcoming referendum vote in Ireland?

The latest opinion poll shows 47% of the electorate in favor, 35% against and 18% undecided. The two government parties, Fine Gael and Labour, are campaigning actively for a Yes vote, as is Fianna Fáil from the opposition benches.

They are joined on the Yes side by organizations representing business interests, including the Irish Business and Employers Confederation, the Irish Farmers Association and the American Chamber of Commerce in Ireland, and by various pro-European activists and groupings. Supporters of a Yes vote contend that voters should back the referendum to ensure stability, to spur recovery and to maintain Ireland’s standing and influence in Europe.

Urging a No vote are Sinn Féin and the United Left Alliance, which is comprised of the Socialist Party, the People Before Profit grouping and other left-wing elected officials and activists. They are joined by a number of labor unions, such as Unite, Mandate and the Technical, Engineering and Electrical Union. Most intriguingly though, Éamon Ó Cuív TD (member of Irish parliament) of Fianna Fáil has publicly announced that he will defy his party leadership and will vote No.

The No side argues that a Yes vote would enshrine draconian austerity as government policy and endorse a European right-wing agenda that favors financiers over the working class and the poor. Here are six things to watch out for over the next few weeks. The first three are short-term and linked directly to the upcoming vote. The final three are longer-term and relate to the implications for political parties of their conduct of the referendum campaign.

First is the context. Irish people have now endured years of budgets that have slashed spending and increased taxes.

They have been asked to pay a property tax this year and will soon be asked to pay water charges. Much of this has been at the behest of “foreign masters” – the EU, IMF and the European Central Bank (ECB). The electorate is angry and a significant segment is doubtless looking for an opportunity to vent their anger. Will this be the time? The answer to that question could come down to whether enough people become convinced that Ireland can be bailed out in future, even if it can’t access the ESM.

Second is the tenor of the Yes campaign.

The different, disparate arms of the Yes campaign have to be very careful. Instilling a sense of fear into voters of the consequences of a No vote can be a useful, if cynical, way to convert minds, if not hearts, to their side. Yet the Yes campaign will have to be careful not to push the “fear factor” too far, so that voters feel like they are being pushed into a corner or disrespected. Campaigners will have to stress equally and articulate tangibly the positive consequences that will flow from approving the referendum.

Third is the packaging of the No campaign. Although it is relatively easy and quite affecting to say that the fiscal compact will impose harsh measures on those least able to bear them, No campaigners will need to make the case as to why a No vote is a realistic option. Just what will Ireland do if another bailout is needed and the country cannot access the ESM? They must spell this out clearly, consistently and repeatedly for voters and need to identify spokespersons who can do so credibly and sensibly.

This will be crucial to overcoming the significant disadvantages in personnel and infrastructure the No side faces against the political parties and powerful interests urging a Yes vote.

Fourth is how Fianna Fáil will manage the internal dissent to the leadership’s endorsement of the referendum. Éamon Ó Cuív, the grandson of party founder and former Taoiseach (Irish prime minister) and President of Ireland, Éamon de Valera, is against the treaty.

Given that he is who he is, the party can’t take Ó Cuív’s opposition lightly, despite his assertion that he will not actively campaign for a No vote. His voice carries a lot of weight within Fianna Fáil’s grassroots, especially in rural Ireland. Indeed, two of the party’s Connemara-based Galway County Councillors have already announced that they will also be voting No.

Some observers believe that Ó Cúiv, who has declared his affinity for a Fianna Fáil/Sinn Féin alliance, ultimately wants to lead a fight for the “heart and soul” of Fianna Fáil or will form his own breakaway grouping. It’s improbable that either endeavor would amount to much, but can an already decimated Fianna Fáil absorb any further erosion of its base?

Fifth is the difficulty this referendum and, more broadly, the ongoing process of putting Ireland on the road to recovery presents the Labour party. While the party leadership, especially its leader, Tánaiste (deputy Irish prime minister) Eamon Gilmore, is unapologetically pro-Europe, many on its left flank are not. They are skeptical of and opposed to, above all else, the spending cuts that the government has pushed through at the behest of “foreign masters.” Moreover, several labour unions, traditionally the bedrock of Labour’s support, are opposed to the referendum.

And lastly, Sinn Féin, the United Left Alliance and others on the left are presenting themselves as a principled alternative to disgruntled Labour voters. With local elections two years away, the conduct of the referendum campaign is hugely important for Labour.

The party must make its own case for why it favors a Yes vote as the Labour party, not just as the junior government partner of Fine Gael, which is increasingly perceived as a right-wing party. Sixth is what impact the campaign and the vote’s outcome will have on Sinn Féin’s political fortunes. As Ireland’s economic malaise has deepened, Sinn Féin’s support has surged.

Much of this surge has resulted from the party’s clever posturing and long held skepticism about Europe. That has brought it to best ever approval rating of 21% in the latest opinion poll. And unsurprisingly, the party is campaigning for a No vote again this time. But Sinn Féin can only attract so much support by opposing everything. Its rhetoric about getting the EU and IMF out of Ireland is undeniably appealing to an innate sense of patriotism in Irish people and is consistent with the party’s overarching ideology.

This rhetoric, however, is regarded as totally unrealistic by many people in Ireland, particularly middle class voters, who believe that Ireland cannot dig its own way out of the hole the country is now in and don’t like the Sinn Féin brand anyway.

Generating wider buy-in is essential to Sinn Féin’s longer-term strategy. How the party promotes a No vote as being in the best interests of the Irish economy will reveal the extent of the sophistication of that strategy. While early polls all show that the Yes side has the lead, there is a large block of undecided voters, volatility in the electorate and a long way to go until the 31st of May. An interesting month lies ahead.